Nigeria’s loss of N557bn to contract inflation




The revelation by Paradigm Leadership Support Initiative (PLSI) last week that the federal government has lost N557 billion between 2013 and 2017 to infractions relating to award of contracts, unremitted advances to staff, contract inflation, among others, is not only deplorable but is also condemnable.

The lead Researcher, Mr Osonuga Adedeji, made the revelation during PLSI’s 5th anniversary and launch of research themed: Achieving Accountability and Development in Nigeria”.

According to him, the federal government lost N17 billion to unretired advances granted to staff, N26 billion was also lost due to abandonment of contracts or projects.

He explained that N17. 4 billion was lost due to non-remittance of taxes, while a whooping N188. 6 billion was loss due to the non-collection of arrears of taxes by the Federal Inland Revenue Services (FIRS). He further said that the loss of revenue due to non-remittance of Internally Generated Revenue (IGR) to Consolidated Revenue Fund stands at N157 billion.

He said about N51.3 billion was also said to be lost due to payment vouchers not presented for audit, over-payment of salaries and allowances, virement without approvals, irregular payment, diversion of grants, among other. The report further covered how government lost funds due to inflation of contracts, unauthorised variations, among others. The lead researcher, however, observed the contravention of provisions of Financial Regulations (2009) by some MDAs including misappropriation and misapplication of funds and also virement of funds without approvals by the National Assembly.

The Executive Director, PLSI, Olusegun Elemo, during his remarks noted that many of the infractions deny the ordinary Nigerian access to key services that should improve the quality of lives that could have translated to development.

Elemo explained that the aim of the report was to examine compliance of federal Ministries, Departments and Agencies (MDAs) of government with Public Procurement act, Financial Regulations and other relevant laws over a five-year period to ascertain the level of waste and inefficiency in the utilisation of public funds and consequent impact on Nigeria’s development.

It is quite unfortunate that corruption has remained an endemic issue in Africa’s largest economy, harming its public finances, deterring business investment, exasperating inequality, reducing the standard of living, and weakening the social contract between the government and its people.

In a recent report on the Impact of Corruption in Nigeria’s economy PricewaterhouseCoopers warned that corruption could cost Nigeria up to 37% of GDP by 2030, or around $1,000 per person, if not urgently addressed. The report found that corruption has a dynamic impact, which is felt the most by poorer households and smaller firms in Nigeria.

Corruption has been described as an “existential threat” to Nigeria and “the single greatest obstacle preventing Nigeria from achieving its enormous potential.” Matthew Page, who developed a taxonomy of corruption in Nigeria, described the country as one of the world’s most complex corruption environments and has identified 500 distinct types of corruption that occur in the country..

Having campaigned in 2015 as an anti-corruption crusader, Buhari, nicknamed Mai Gaskiya or Mr Honesty, is still seen by many to have impeccable personal integrity and still puts anti-corruption at the forefront of his agenda. “A policy that does not have fighting corruption at its core is destined to fail,” Buhari said. “The battle against graft must be the base on which we secure the country, build our economy, provide decent infrastructure and educate the next generation.” But after six years of Buhari’s agenda, Nigeria still remains highly corrupt.

Although, the Buhari administration has made progress on its war on corruption having successfully prosecuted and convicted some high profile individuals including five former governors, corruption seems to have remained unabated. The government has also formulated and implemented some policy reforms in its bid to tame the corruption monster.

These policies include: the Single Treasury Account (TSA) in which government oversees a single bank account for all revenue; a biometric identification system in banks to trace clients and transfers of funds; the Whistle Blower policy by which more than $370 million and $2.9 billion embezzled assets have been returned as well as the establishment of the Presidential Advisory Committee against Corruption, which recovered over $550 million by removing ghost workers from the public payroll.

These are, no doubt, laudable initiatives in the war against corruption, which is one of the tripod on which the Buhari administration is anchored. The other two are the fight against insecurity and the revamping of the nation’s comatose economy through diversification from oil dependency. But, clearly, corruption is fighting back so fiercely that it has rendered prostrate government’s efforts to tame it.It, therefore, behooves on President Buhari to devise more ingenious and pragmatic strategies and policies as well as strengthen existing ones in order to kill corruption. As the president noted, “If Nigeria does not kill corruption, corruption will kill Nigeria”; this must not be allowed to happen.